2024 U.S. Investor Intentions Survey
Investment Activity Expected to Increase
January 26, 2024 3 Minute Read
- Investors cited higher-for-longer interest rates, tight credit conditions and differing buyer and seller expectations as the biggest impediments to commercial real estate investment activity in 2024.
- More than half of the investors surveyed plan to buy more assets in 2024 than in 2023. Despite less favorable pricing conditions, 40% of respondents plan to sell more than last year. Private equity and real estate funds expect to be more active buyers and sellers in 2024 than other investor types.
- Investors continue to favor Sun Belt cities, high-growth secondary markets and some large East Coast markets for property investment in 2024. Dallas was the most preferred market, followed by Miami, Raleigh, Atlanta and Nashville.
- More investors than last year plan to adopt opportunistic and core-plus strategies. This indicates investors are looking for higher yields and stable income.
CBRE’s 2024 U.S. Investor Intentions Survey found that higher-for-longer interest rates, tight credit conditions and differing buyer and seller expectations are the biggest concerns for real estate investors this year. Recession fears eased from last year.
Investor sentiment has significantly improved. Over 60% of respondents expect to purchase more real estate in 2024 than in 2023, compared with only 16% in 2023 versus 2022. A higher percentage of developers, private equity funds, real estate funds and REITs plan to buy more assets in 2024 than other investor types.
Despite lower property values, 40% of respondents expect to sell more assets in 2024 than 2023, compared with only 14% in last year’s survey. Private equity and real estate funds indicate that they are also likely to sell more in 2024 than other investor types.
About half of investors expect that both their own transaction activity and that of the broader market will recover in the second half of 2024. However, we expect this may occur earlier if the 10-year Treasury yield declines more quickly than expected. CBRE forecasts that the 10-year yield will fall to 3.6% by year-end.
Figure 1: Investment activity expectations for 2024
Figure 2: Expectation of when investment activity will pick up
Large Sun Belt cities and high-performing secondary markets remain attractive for investors in 2024. Dallas, Miami, Raleigh and Nashville are the most preferred investment markets. Dallas took the top spot for the third consecutive year.
While investors continue to expect Sun Belt markets to perform well, some large gateway markets are also viewed as top performers. Boston ranked third, New York City sixth and Washington, D.C. 10th.
Figure 3: Top 10 markets for total property returns
Figure 4: Top 10 most attractive markets for investment
Multifamily and industrial & logistics remain the most sought-after property sectors in 2024. Ninety percent of multifamily investors prefer Class A properties, while nearly half favor value-add Class B/C assets. Class A facilities in major markets are most preferred by industrial & logistics investors. Grocery-anchored centers are most favored by retail investors, while nearly 60% of office investors prefer prime/trophy office properties.
Investors continue to expect pricing discounts across all sectors. The largest discounts are expected for value-add office assets, followed by stabilized office assets and shopping malls. Just under half of investors expect less than 10% pricing discounts for multifamily and industrial & logistics assets. The smallest discounts are expected for grocery-anchored retail centers.
The Bottom Line
While fears of a recession have eased significantly from last year, expectations of higher-for-longer interest rates and tight credit conditions continue to weigh on investor sentiment. This will keep commercial real estate investment activity subdued in H1 2024. Nevertheless, a majority of investors plan to buy and sell as much or more assets in 2024 than in 2023. They also expect investment activity to pick up in the second half of the year. CBRE concurs with this view as interest rates fall and financial conditions stabilize.
Report | Intelligent Investment
February 5, 2024
CBRE's 2024 European Investor Intentions Survey was conducted between November 6, 2023, and November 30, 2023. 888 Europe-based investors participated in the survey, which asked respondents a range of questions regarding their buying appetite and preferred strategies for sectors and markets in 2024.
Respondents indicated considerably stronger purchasing and selling expectations than the year prior and are optimistic that the investment market will return to pre-inflation surge levels in the near to medium-term. However, downward pressure on pricing and a degree of yield expansion is expected to continue in the immediate term. By the second half of 2024, these trends should start to reverse.
Investors are particularly attracted to value-add and opportunistic strategies as they search for higher returns in the current high interest rate environment. As sellers bring these types of assets to the market to generate capital, buyers with higher propensity for risk will increase their activity. Core and core-plus interest in residential and logistics also remains elevated for markets where stock is available. CBRE expects investment activity to increase in 2024, with most deal flow to occur in the second half of the year.
Buying and selling expectations are higher in 2024 than in 2023. Smaller firms, generally comprised of developers and private investors are looking to undertake an aggressive strategy, while the larger institutional investors are willing to offload assets to generate capital.
Investors expect market activity to increase in the second half of 2024 before fully recovering to the levels registered before the global surge in inflation by the end of 2025. Allocation to real estate remains stable and as risk-free rates drop, investor appetite for property will increase. However, the tightened debt lending market still presents a major challenge for European Investors.
Repricing will continue across certain sectors in 2024, although to a much lesser extent than in 2023. Investors have indicated that logistics, residential, and hotel assets have almost fully repriced. High street retail is expected to remain resilient. Office assets, especially in the secondary segments, as well as shopping centres, may see continued movement in 2024.
Value-add and opportunistic strategies are at the top of investors’ minds as they seek to capture yield. Concurrently, appetite for core and core-plus strategies is at its lowest level since the relaunch of our Investor Intentions Survey series in 2021. Residential and logistics have also surpassed office as the most sought-after sectors for investment for the first time.
The UK retained its status as the market with the highest performance expectations, while Poland emerged as a highly sought-after market in 2024. Southern Europe has continued its resurgence, and German cities and Paris remain attractive.
While sustainability factors have come under pressure in the current capital constrained environment, most respondents are willing to consider retrofitting existing assets to meet sustainability standards. Additionally, some investors are still prepared to pay a premium to acquire green compliant assets.
Read the full report for a detailed analysis of our findings.
Report | Intelligent Investment
January 16, 2024
CBRE’s 2024 Asia Pacific Investor Intentions Survey was conducted in November and December 2023. Over 500 responses were received from participants who were asked a range of questions related to their buying intentions, perceived challenges and preferred strategies, sectors and markets for the coming year.